There is a lot of interest in buying bank owned properties these days. A lot of information, some good and some bad, is floating around about the subject. Often the information offered is for sale, with the promise that you can make a lot of money with little effort once you know “the secret formula”. The fact is that there are no secret formula, and to make money it does require effort and being a well-informed foreclosure property buyer. As an ABR and SFR Broker, this is where I help my buyer clients with their REO Purchase.

What Is An REO?

REO stands for “Real Estate Owned”. These are properties that have gone through foreclosure and are now owned by the bank or mortgage company. This is not the same as a property up for foreclosure auction. When buying a property during a foreclosure sale, you must pay at least the loan balance plus any interest and other fees accumulated during the foreclosure process. You must also be prepared to pay with cash in hand. And on top of all that, you’ll receive the property 100% “as is”. That could include existing liens and even current occupants that need to be evicted. A REO, by contrast, is a much “cleaner” and attractive transaction. The REO property did not find a buyer during foreclosure auction. The bank now owns it. The bank will see to the removal of tax liens, evict occupants if needed and generally prepare for the issuance of a title insurance policy to the buyer at closing. Do be aware that REO’s may be exempt from normal disclosure requirements. In some states including Texas, for example, banks are exempt from giving a Seller Disclosure Statement, a document that normally requires sellers to tell you about any defects they are aware of.

Is It A Bargain?It’s commonly assumed that any REO must be a bargain and an opportunity for easy money. This simply isn’t true. You have to be very careful about buying a REO if your intent is to make money off of it. While it’s true that the bank is typically anxious to sell it quickly, they are also strongly motivated to get as much as they can for it. When considering the value of a REO, you need to look closely at comparable sales in the neighborhood and be sure to take into account the time and cost of any repairs or remodeling needed to prepare the house for resale. The bargains with money making potential exist, and many people do very well buying foreclosures. But there are also many REO’s that are not good buys and not likely to turn a profit. I am well able and have the resources to help you determine if the property you are considering is a good investment, and how much to offer.

Ready To Make An Offer?Most banks have a REO department that you’ll work with in buying a REO property from them. Typically the REO department will use a listing agent to get their REO properties listed on the local MLS. Before making your offer, you’ll want your agent to contact either the listing agent or REO department at the bank and find out as much as you can about what they know about the condition of the property and what their process is for receiving offers. Since banks almost always sell REO properties “as is”, you’ll want to be sure and include an inspection contingency in your offer that gives you time to check for hidden damage and terminate the offer if you find it. As with making any offer on real estate, you’ll make your offer more attractive if you can include documentation of your ability to pay, such as a pre-approval letter from a lender. After you’ve made your offer, you can expect the bank to make a counter offer. Then it will be up to you to decide whether to accept their counter, or offer a counter to the counter offer. Realize, you’ll be dealing with a process that probably involves multiple people at the bank, and they don’t work evenings or weekends. It’s not unusual for the process of offers and counter offers to take days or even weeks.

I have over 25+ years of experience in buying and selling foreclosures/REO'S and will be representing your best interest to help you determine if the property is a good match for your needs and expectations. Also, I am a certified, SFR, Short Sales & Foreclosure Resource Broker, have completed special training and acquired special skills in order to guide my clients through the purchase and sale of REO properties and short sale transactions. The SFR designation which is awarded to an agent or broker that completes the Short Sales & Foreclosure Resource requirements is awarded and recognized by the National Association of REALTORS, as their recommended designation for this area of real estate specialization. In addtion, it is the company poilicy of Jeanie Elliott REALTORS to only work with buyers on short sales and foreclosure property transactions that are clients, not just customers of our company in order to protect our clients best interest in these types of purchase transactions. Jeanie Elliott of Jeanie Elliott REALTORS is also an ABR, Accredited Buyers Representative broker, and therefore offers both areas of specialization to those clients we represent in any short salesand foreclosed property offers, contracts and closed sales.

Please call me today at 972-612-2277 to discuss my ABR buyer's representation services and how I can help you in finding, negotiating and purchasing these types of properties. I know of properties coming up that have not made it to auction yet in the areas where I specialize including Allen ISD, Plano ISD, Frisco ISD, McKinney ISD, Prosper ISD, Celina ISD, Lovejoy ISD, Wylie ISD, and the smaller towns and rural communities of Fairview, Lucas, Murphy, Parker, Melissa, and Saint Paul.

For Foreclosures and Bank Owned Homes and Estate Lots on the Market (MLS) Call Jeanie Elliott; to see Foreclosed Homes, REO Properties, Bank Owned Real Estate, Lots and Homes on the Market and for sale in Multiple Listing Service, call 972-612-2277 today.

Jeanie Elliott of Jeanie Elliott REALTORS is a Certified SFR Short Sales & Foreclosure Resource Broker, Certified by the National Associationof REALTORS. Ms. Elliott has also been awarded the coveted ABR Designation by the National Association of REALTORS, and is an Accredited Buyers Representative Broker offering these specialized services to her clients.

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